PM Modi rings a bell of caution for India’s cryptocurrency investors

New Delhi: While India's stand on cryptocurrency is yet to take a tangible shape, PM Modi, meanwhile has rung a bell of caution for India's cryptocurrency investors, especially younger ones.  'Take cryptocurrency or bitcoin, for example,' the Prime Minister told a forum hosted by the Australian Strategic Policy Institute on Thursday. 'It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youths'. PM Modi's alarming remarks have come at a time when young India is showing a lot of interest in cryptocurrencies. 

PM had chaired a discussion on way forward in Bitcoin and Cryptocurrency a few days back. Sources had said that the government is preparing to introduce legislation to regulate digital currencies. 

Speaking at the Sydney Dialogue, a forum on emerging, critical and cybertechnologies, PM Modi framed virtual money, which is highly popular in India and exists beyond state and central bank control, as a domain that needs to be closely policed.

Earlier a report said that the government could bar the use of cryptocurrencies for transactions or making payments, but could allow them to be held as assets like gold, shares or bonds. Critics of cryptocurrencies allege that largely anonymous unregulated transfers make them a perfect tool for drug traffickers, people smugglers or money laundering.

Several nations have begun to legislate to introduce oversight over cryptocurrencies, and exchanges in many jurisdictions are now subject to the same regulations as other financial service providers.

India had effectively outlawed crypto transactions in 2018. However, on March 4, 2020, a three-judge bench of the Supreme Court had quashed the ban that the RBI had imposed on trading in cryptocurrencies like Bitcoin in April 2018. Since then the craze of trading in virtual currencies has grown multifold. 

The craze has now evolved into a boom in the sector as the country's vast young population took heed of an advertising blitz by Bollywood and cricket stars.

According to a report published in October by investment portal BrokerChooser, more than 100 million Indians have embraced virtual currencies, ranking the country behind only the United States, Russia and Nigeria.
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